The allowance designed to offset overseas prices will increase or remain steady for service members stationed in Germany beginning March 1.
The overseas Cost of Living Allowance, or COLA, is the non-taxable supplemental pay allowance designed to offset overseas prices of non-housing goods and services.
The new COLA will affect the roughly 32,000 U.S. service members stationed in Germany. Any changes will be reflected in a service member’s leave and earnings statement at the end of February.
COLA will increase for service members residing in Kalkar, Pfullendorf, Kaiserslautern, Spangdahlem, Stuttgart, Vilseck-Grafenwoehr and Wiesbaden
COLA remains constant for those residing in Ansbach, Frankfurt, Garmisch, Geilenkirchen and Hohenfels.
Two sets of data determine adjustments to the 2020 COLA: The COLA Living Pattern Survey conducted October – November 2018 and the annual Retail Price Schedule conducted in November 2019.
A service member’s COLA payment is based on a COLA index. The COLA index is determined through a calculation comparing service members’ overseas shopping patterns — along with the prices of more than 100 goods and services in that overseas location — with U.S.-based service members’ shopping patterns and average prices for equivalent goods and services in the U.S.
The value of an index point depends on rank, years of service and number of command-sponsored dependents. One index point, for example, for an E-6 with 10 years of service and three dependents is about $34 per month. One index point for an 0-3 with 10 years of service and three dependents is about $44 per month.
The index reflects living costs in Germany above the cost of living in the U.S. An index of 110, for example, indicates a 10% higher cost of living than in the U.S. while an index of 122 indicates a 22 percent higher cost of living compared with the U.S.
The next Retail Price Schedule — a determining factor in the 2021 COLA Index — is slated for November 2020, while the next Living Pattern Survey is scheduled for October 2021.
Service members can calculate their COLA at www.defensetravel.dod.mil/site/colaCalc.cfm.